Does consolidating multiple SL actually help FICO Score?

[Bankermeister]

I pulled my recent Equifax FICO report and it provides some info and advice.  I wanted to know if it would be advantageous to consolidate my student loans.  The report lists "Number of your accounts carrying a balance = 18".  Of those 18 accounts, 14 are student loans.  The report provides the advice, "You should consider reducing the number of your accounts that carry a balance and keep your balances low."  I am wondering if a Student Loan Consolidation would actually reduce my  quantity of student loans to "one account" ?  Would doing this improve my FICO score?  Based on amounts and interest rates there is no direct advantage for me to consolidate outside of this possibility.

[ACG23]

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@Bankermeister wrote:

I pulled my recent Equifax FICO report and it provides some info and advice.  I wanted to know if it would be advantageous to consolidate my student loans.  The report lists "Number of your accounts carrying a balance = 18".  Of those 18 accounts, 14 are student loans.  The report provides the advice, "You should consider reducing the number of your accounts that carry a balance and keep your balances low."  I am wondering if a Student Loan Consolidation would actually reduce my  quantity of student loans to "one account" ?  Would doing this improve my FICO score?  Based on amounts and interest rates there is no direct advantage for me to consolidate outside of this possibility.

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I'm in the process of doings. My understanding is that it does help. I'll let you know within a week or so .

doing this*

[FromThereToHere]

I searched the forums for this very question before pulling the trigger on consolidation. It was prudent of you to ask -- I wish that someone had posted their experience in advance for my benefit. Basically, I'd be careful with this unless you have some legitimate financial purpose such as locking in a lower interest rate. I don't think it's going to help your credit.

I just finished consolidating my loans (eight tradelines averaging a little over 11 years old, no derogatories). All of the old tradelines were closed (described as "Paid in Full") and then I had two new tradelines opened with new origination dates (one a consolidation of the subsidized loans, and the other a consolidation of the unsubsidized loans).

My FICO scores took a serious beating. The day that the tradelines were updated, I went from 809 EX --> 748 EX and 803 EQ --> 744 EQ. (I didn't check TU.) The myFICO explanation is that: (1) "You have too few accounts in good standing" (my only open accounts are a credit card with no derogs and the two newly consolidated loans) and (2) "The remaining balance on your mortgage or non-mortgage installment loans is too high." That latter one is especially frustrating since I'd paid tens of thousands of dollars down on the original loans before consolidating them. Apparently, now that they are consolidated, the FICO algorithm is penalizing me since I (obviously) owe 100% of the newly consolidated loans, whereas I think I the algorithm may have previously credited me for the fact that the loan balances had diminished from the high amount.

Anyway, food for thought. My experience shows that you can definitely have a score in the 800s even with at least eight open installment loans. Perhaps you would gain a few points for having less installment loans, but I think that you'll be penalized far more both for adding new account(s) and for having not paid down a significant percentage of the balance on the new accounts.